Steps Towards Purchasing Your First Home
1. Review your credit. Mortgage lenders will be closely evaluating your credit and finances. Make sure that you know what is on your credit report first. Start by requesting a copy of your credit report from the big three credit agencies - Equifax, Experian and TransUnion. When you receive your report, review it carefully for mistakes. If you find an error, take corrective action by following the instructions the credit agency provides. The sooner the process starts, the better, as the investigation will take time.
2. Take steps to raise your credit score. First and foremost, this means paying every bill on time every month. After that, it means paying down as much of the debt you already have. Not only will this raise your credit score, but it could free up some cash later when you’re finally making monthly mortgage payments.
3. Learn about mortgages. Each type of mortgage has its pros and cons. Finding the one that is right for you will depend on your personal situation. Factors that will affect this are how much you have for a down payment, how long you plan to own the home, what is your tolerance to monthly fluctuations, etc. Be thorough in your research, as having the wrong mortgage can be as bad as choosing the wrong home.
4. Make a wish list. Write down all the things you want from a home. Include the size, features, location, etc. Categorize each item on the list as a "need" or a "want." Having a list ahead of time will help you save time, narrow your search, and help you stay focused.
5. Find a real estate agent. Even though there is a lot of information on purchasing a home available, having a professional Realtor to represent you is a good idea. The peace of mind professional guidance offers can remove a lot of worry throughout the home buying experience.
6. Get pre-approved for a home loan. Pre-approval from a mortgage lender will help you in several ways. First, it will reveal realistically how much you can afford. Second, it will help you identify any credit problems you may have early on. Finally, it will show home sellers that you're serious, which can be helpful if there are ever multiple buyers.
7. Get a home inspection. So you’ve found a house you think you really want. Whether it’s a new home or an older one, a home inspection is a good idea. They cost around $500, which is pretty inexpensive compared to what major home repairs would cost. A home inspector will examine the home's roof, foundation, heating and cooling systems, and other important areas. Though it’s impossible to find everything that is wrong in a home, an inspection can go a long way towards offering peace of mind.
For a more in-depth discussion about steps towards buying your first home, register to attend a Barker & Hedges home buying seminar. At these monthly events, all aspects of the home buying process are covered including how to pick a Realtor, how much money you will need for down payment, home buying tips, the home buying process, the purchase agreement from start to finish, and more.?